Gold Price News: Gold Holds Up Near Record Highs

Gold prices ended higher on Friday, capping a strong week for the precious metal, which included a mid-week rally to a new all-time high.

Prices edged higher to $2,742 an ounce on Friday, showing a moderate recovery from an intraday low of $2,718 an ounce. That compared with around $2,735 an ounce in late trades on Thursday.

US durable goods orders for September came in slightly below market expectations on Friday, while the Michigan consumer sentiment figures for October gave a slightly better-than-expected reading. Neither set of data did little to change market expectations of a 25-basis point cut to interest rates by the US Fed at its upcoming meeting on November 7.

Recent all-time high prompts discussion over outlook

Wednesday’s all-time high for gold of $2,758 an ounce has prompted some discussion in the market about how high gold can go, and whether the recent rally can be sustained. Undoubtedly the higher prices could eventually act to curb jewellery demand and retail investor interest in physical bars and coins, while at the same time sending a stronger signal to miners to increase supply as well as boosting supply from recycling. All of the above factors point to the possibility of the recent gold price rally moderating.

Supportive factors still in play

However, the factors that have propelled gold to new highs are still in play: regional conflicts and political risk driving safe haven demand, and falling interest rates boosting interest in non-yielding assets. A further wildcard factor is whether central bank demand remains high or whether the recent high prices act as a brake on their purchases. And should the global economy slow down in future, this would be expected to trigger further monetary loosening and potential quantitative easing that would simply provide further support for gold.

Upcoming data to watch out for

Monday is looking fairly light on data releases and the markets will be watching out for Tuesday’s US JOLTS job openings and CB consumer confidence figures for the latest update on the US economy.